Brazil Aims At IP Rights In US Cotton Row

BRASILIA (Dow Jones)–Raising the stakes in a continuing trade conflict over U.S. cotton subsidies, Brazil on Monday added intellectual-property rights on certain U.S. imports to a list of items that could be subject to retaliation under a World Trade Organization ruling last year.

Brazil proposed a list of 21 additional items that could be subject to trade retaliation, including suspension of patents and intellectual-property rights on items such as chemicals, pharmaceuticals, software, books, and films. The Brazilian government estimated the value of the sanctions announced Monday at $238 million.

The latest proposal comes in addition to last week’s publication of more than 100 U.S. goods that will be subject to tariffs totaling $591 million as a result of the cotton dispute. The tariff hikes are scheduled to take effect April 7.

Following Monday’s announcement, Brazilian officials said they hoped the latest proposal would help bring pressure for a resolution to the conflict.

“Brazil isn’t adopting any measure in the area of intellectual property that affects legislation or our commitment with protection of intellectual property,” said Carlos Marcio Cozendey, director of the economics department at Brazil’s foreign-relations ministry. “We’re certain that the sectors interested in intellectual property will help us in Washington to change the measures that were considered illegal.”

The proposed measures against U.S. intellectual-property rights announced Monday will be subject to public hearings for 20 days before they are made final. If carried out, the retaliation against intellectual property would be the first ever successfully applied in a WTO dispute.

Reacting to the announcement. U.S. trade groups Monday said it would set a negative precedent and urged the Brazilian government to suspend any cross-retaliation while both sides keep working on a solution to the underlying problem.

“Even a temporary measure that results in the undermining of any IP rights—whether patents, trademarks or copyrights—will cause substantial harm to IP-based industries, workers, and consumers in both the U.S. and Brazil,” said Mark Esper, executive vice president of the U.S. Chamber of Commerce’s Global Intellectual Property Center. “Such an action will also undermine the global system of IP rights and laws, and could make Brazil a less hospitable place for IP-based industries to do business in the long run.”